Market Outlook By Experts


Anil Manghnani, Modern Shares and Stock Borkers

The Sensex has now closed beyond the 76% retracement level of 11753 and thus is likely to test the next levels of 11898 & 12016. The Sensex has closed the week above a major resistance range placed at 11735-11753 and thus should continue its upward journey to reach the next targets placed at 11898-12016. Though the Sensex is rising it is doing so with reduced volumes and this is a cause of concern. The Sensex should move to the next targets of 11898-12016 and then give into a correction. By closing beyond the 76% retracement level of 11753, the Sensex has exhibited strength and thus suggests that in the next fall the Sensex would make a higher bottom at about 10650-10600 levels. I would advise booking profits in the on going rally to enter at a lower range of 11410-11060 for trading buys and in the range of 10650-9950 for investment buys. The midcap index is still in a corrective rally and thus should face stiff resistance at a level of 4567. One should use this rally from 4326 upto 4567 to exit positions. One should only buy midcap stocks on deeper corrections in the midcap index. Although the Midcap Index closed higher this week, one clearly witnessed corrections in many midcap stocks. This is a clear indicator that most midcap stocks are in a corrective rally and are already showing early signs of fatigue. Thus my advice would be to continue exiting these stocks in every rally. Many of the pharma stocks have shown good movement in the past week with both price and volume break out. Thus one should focus on this sector in the near term as this sector could outperform the Sensex in the coming weeks.

Ashwani Gujral, Technical Analyst

Market gets ready to cross 3450 I had mentioned last time that the market is showing bull market tendencies. Now, please note that does not mean I am talking about new highs coming. I am talking about market action. Bull market action is one where ever consolidating days end positive. Corrections, when they come are either running corrections, or just one or two day minor dips, before the market recovers sharply. This market is showing all these tendencies. I think at 3000, the market was much more shaky and non trending than it is now. So today's market is a better market to be trading in, as this market is seeing good institutional flows and a strong trend to back. On chartical basis, the market has held 3400 on the Nifty very well, we believe once 3450 is taken out, the market should head to 3550-60. I can see consciously, most market gurus, are avoiding long range targets. The reason for that is the retail trader gets complacent when such targets are given. I think its more useful to plan the next 100 points on the Nifty at a time, rather than waiting on larger targets and trying to ride reactions, but that is my view as a swing trader. Sectors which look bullish at the moment are IT, autos, cement, banks. Sectors to avoid are sugar and metals. Some good breakouts I have seen over the week are Bajaj Auto, Siemens, ICICI Bank, HDFC Bank, Glaxo Smithkline, IPCL, Tata Motors, Cipla, Divi's Lab, Maruti. Overall I believe that the next week will be positive with a lot of strength in many heavyweights.

Jagdish Malkani, Member NSE

Jagdish Malkani, Member NSE says that the market has ended on a positive note today and we will carry the momentum into the next week by opening firm. Temporarily he sees the markets to be on an upswing, but maintains that we are likely to see atleast a 10% correction in the indices before the end of the year. He believes that the Nifty can touch the 3,500 levels, while the Sensex should touch 12,200 before correcting On the sectoral front, he likes the cement sector and advices buying in them. He believes that the rally in the indices will be lead by the heavyweights like RIL, ITC and Infosys Technologies. He advices staying away from the media, sugar and tea stocks, though they have seen good buying today.

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